WHEN I last wrote about Goldman Sachs in late March the most politically-connected and luckiest firm on Wall Street was in the middle of rigging the stock market — again.

“Something smells fishy in the market. And the aroma seems to be coming from Goldman Sachs,” is the way I put it in that March 28 column.

Well, a lot has changed in just the past few weeks. And I’d like to put it all together for you, and for the rest of the media should it choose to follow what is shaping up to be the most incredible financial story ever.

Back in March I noted that the rally occurring in the stock market had the indisputable fingerprints of Goldman all over it. There were numbers to back it up.

Despite the fact that regular investors seemed to be pulling their money out of the market or — at best — investing conservatively, stock prices were zooming. The reason was simple: Big investors were pouring money into equities.

And Goldman Sachs was the biggest of the big.

According to the New York Stock Exchange figures for the week of April 13 that I quoted, Goldman executed twice as many big trades — called “program” trades by the industry — as any other firm. And, the bulk of the 1.234 billion shares bought by Goldman that week were paid for with the firm’s own money.

Of course, Goldman would have to be mighty confident that stock prices were going up to risk so much of its own capital. Or, perhaps, it knew stocks would be rising.

This was the time, remember, when banks were trying to recapitalize by selling shares to the public. Goldman, you’ll also recall, had turned itself into a bank holding company so it could take $10 billion in government money under the Troubled Asset Relief Program.

Goldman also sold billions worth of new stock to the public while all this was happening.

How much harder would it have been for banks to sell stock to nervous investors if the market was swooning rather than booming? Goldman’s sudden and inexplicable optimism about stocks was incredibly opportune for the banking industry in general, for Goldman in particular and — here’s where the conspiracy starts to unfold — for the government.

It’s tough, however, to do what needs to be done to rescue the market when pesky journalists and annoying bloggers are looking over your shoulder.

So a couple weeks ago the NYSE suddenly announced that brokerage firms would no longer have to report their program trades. The new rule takes effect next week.

Convenient!

Wall Street and Washington have been playing footsie for decades.

Back in the late 1980s, President Reagan determined that the stock market was so vital to the country that he signed an executive order creating the President’s Working Group on Financial Markets. What the president wanted from this group was unclear, but the precipitous drop in stock prices in 1987 and 1989 had made everyone nervous.

Soon afterward, Robert Heller, a former Federal Reserve governor, came right out and proposed what the president was probably thinking — the stock market should be rigged in times of impending disaster. But instead of going through all the trouble of buying actual stock, like firms do in program trades, Heller suggested a shortcut — the purchase of stock index futures contracts.

From that point on everyone suspected that Washington would jump in to calm the stock market whenever the waters got rough.

Goldman has so many top executives who’ve moved into government that the company is now not-so-affectionately called Government Sachs.

Hank Paulson, the incompetent Treasury secretary during the last Bush Administration, was a former chairman of Goldman. Paulson almost slipped about the cozy relationship Washington had with Wall Street when he was being interviewed on TV and blurted out that it was part of his job to speak frequently with “market participants.”

No, it’s not.

Was he tipping information to Goldman during these conversations, like interest rate decisions? Was Goldman some sort of ex-officio government conduit?

The clincher came last week in the most bizarre and unexpected twist to this unpredictable decades-long tale.

Federal prosecutors accused a guy named Sergey Aleynikov of stealing proprietary “black box” computer codes from Goldman. The agent in charge of the case said the following in court: “The bank (Goldman) has raised the possibility that there is a danger that somebody who knew how to use this program could use it to manipulate the market in unfair ways.” What was Goldman doing with a program that could “ma nipulate the market in unfair ways”?